Fears for future of Greek ferries

Jeremy Guest: May 2012

Fears are growing for the future of some Greek Island ferry companies as the economic situation in Greece continues to look bleak. Many Greek Island ferry firms which manage ferry routes between the islands and the mainland ports have accumulated losses estimated at more than €1billion over the past few years.

The future for some of these ferry companies hangs in the balance as passenger numbers fall and routes are affected by striking seamen angry at cuts in pay, pensions and working conditions.

Licences issued to ferry firms force them to operate inter-island routes throughout the year, even in winter when routes are clearly unprofitable. They rely on heavy holiday traffic to cover the winter losses.

But the long-awaited Easter surge in passenger traffic was not even near what was needed this year as cash-strapped Greeks stayed on the mainland for the break and early tourist holiday bookings failed to take off despite a fall in ferry ticket prices.

Greek island ferry companies say the numbers booking tickets to and from the island this Easter, both Greeks and foreign tourists, fell nearly 50% compared to the same period in 2011. A Greek ferry strike over the Easter weekend only made matters worse.

According to an official report the top four Greek ferry companies, ANEK, Minoan, Lesbos Maritime and Attica marked up losses between them of €210 million in 2011 and only managed to limit the losses by ferrying Libyan citizens fleeing the war in their their country.

But it is is not only the drop in ticket sales that has hit them hard this year. The Greek government still act owes the ferry companies around €12 million in unpaid subsidies for running unprofitable routes to the more remote Greek islands.

This year looks like being the most difficult one yet for Greek ferry companies as prices increase and ticket sales continue to fall. In 2011 profits on some routes dropped 30% and fuel prices have also risen sharply in 2012. On top of that banks are cutting financial help to maritime companies as the recession bites ever deeper into the Greek economy.

On the positive side ferry ticket prices have dropped 8-10% this year as taxes have eased and a price war has broken out on some routes — to the advantage of the consumer if not the ferry firms — while some companies are now co-operating on routes in a bid to cut costs.

A report warns: "The overall condition is judged very critical and ... it is absolutely necessary to have common approach with common objectives which will allow the existence of the sector."